Indian central bank chief in surprise move to step down

India’s central bank governor Raghuram Rajan, who has faced criticism from members of the ruling party for keeping interest rates too high, stunned officials on Saturday by announcing he would step down when his term ends on Sept. 4.

Rajan, a former chief economist at the IMF, has been popular with foreign investors for his efforts to tackle inflation, and won praise for helping rescue India from its worst currency crisis in more than two decades after taking the helm in September 2013.

But in a nearly 900-world letter to staff he said he planned to return to academia, even as he noted two of his actions – the creation of a monetary policy committee to set interest rates and the clean-up of the banking sector – remained unfinished.

“While I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as Governor ends on Sept. 4, 2016,” Rajan said in the letter released by the Reserve Bank of India (RBI).

“I will, of course, always be available to serve my country when needed.” Read more